Example:
This link will include a definition of the underlined text.

Savings Deposit:
Accounts that pay interest and can be withdrawn from on demand. Offered by banks, credit unions and savings and loans.

Envelope Budget:
A method to allocate money for expenses by creating an envelope for each expense. Write the payment schedule on the envelope.

Budget:
A summary of planned expenses along with ways to meet them.

Compound Interest:
Interest paid both on principal and on interest earned during previous compounding periods. Compounding adds interest to the sum of principal and any previous interest to calculate interest in the next period.

Simple Interest:
The interest that is paid on an initial investment only. Simple interest is calculated by multiplying the investment principal by the annual rate, and that sum by the number of years.

Ledger:
An account book that records transactions.

Investment:
The investing of funds to gain profitable returns: interest, income, or appreciation in value.

Checking Account:
A deposit account for funds intended for quick turnover. Some checking accounts offer low interest rates on unused cash.

Money Market:
A savings account that offers a competitive rate of interest (real rate) in exchange for larger-than-normal deposits. Many money market accounts place restrictions on the amount of transactions (usually five or less) that you can make during a month. An investor is required to maintain a specific balance in the account to receive the higher rate of interest.

Index Fund:
A portfolio of investments that are weighted the same as a stock exchange index to mirror its performance. It's also called indexing. Investing in an index fund is known as passive investing. The advantage to such a strategy is the lower management expense ratios on index funds. Mutual funds often fail to beat broad indexes such as the S&P 500.

U.S. Savings Bonds:
A non-marketable security issued by the U.S. Treasury in relatively small denominations for individual investors. Three categories of bonds are available. Interest on these bonds is exempt from state and local, but not federal, taxation. TIP: For a beginning investor, U.S. savings bonds are often a better investment than certificates of deposit, because taxes are not due until the bonds are redeemed.

Certificate of Deposit:
A money-market bond of a preset face value paying fixed interest and redeemable without penalty on maturity only.

Individual Retirement Account:
An investment account for setting aside a specified amount each year. The contributions and interest are tax-deferred until retirement.

401K:
A retirement savings plan funded by employee contributions and matching contributions from the employer. Contributions are made from the employee's salary before taxes and the funds grow tax-free until withdrawn. Upon withdrawl, the funds can be converted to an IRA.

Black Friday:
Also Black Monday and Black Tuesday. A day of economic catastrophe. The first Black Friday was Sept. 24, 1869, when stock manipulators Jay Gould and James Fisk tried to corner the gold market and caused its collapse. The adjective black has been appended to similar occasions ever since, including Oct. 29, 1929, the Tuesday of the market collapse that marked the beginning of the Great Depression. Black Monday, on Oct. 19, 1987, occurred when the stock market experienced its greatest fall since the Great Depression.

Buyer's Remorse:
An emotional condition when a person feels regret after the purchase of an expensive item: property, cars, computers, jewelry. It is brought on by a sense of doubt that the correct decision has been made.

Check Register:
A register of checks issued in numeric order.

Credit Card:
A plastic device used to obtain consumer credit. Credit cards can be issued by a business, department store, or an oil company, to make it easier for consumers to buy their products.

Interest:
The rent paid to borrow money. The lender receives compensation for deferring their own consumption. The original amount lent is the principal, and the percentage of the principal that is paid/payable over a period of time is the interest rate.

On Sale:
A reduced prices.

Money management for the younger generations

By Jason Wollam

It's hard for younger generations to save money. Today's companies are constantly marketing to youngsters' impulsiveness and sense of peer pressure. With education at the top of the agenda, cashflow usually consists of dad's ATM card. So before you go out and buy a new Wii, read some of the information provided here on the right way to manage that extra cash.

Other useful additions on this feature: an interest bearing calculator and links to other websites about financial topics. Be on the look out for definition links; when you hover your mouse over them, they will provide a short description of the word or phrase underlined.

In the green

Let's start with the most important part of money management: saving. Saving money is a loose term used to describe anything other than spending money. Establishing a savings plan can be as simple as stashing cash under a mattress.

Saving money under a mattress seems rather crude. However, some advisers do suggest techniques that are similar, such as the envelope budget.

It is best to open a savings account at your local financial institution. Most savings accounts or savings deposit accounts are interest gaining, meaning the bank pays you a percentage of the total balance in the account. Interest on a savings deposit account is usually compounded daily, as opposed to simple interest, which is applied only once to the entire investment. When opening a savings account, be sure to ask if a minimum balance is required to earn interest. Also, get a detailed statement of any fees and restrictions that are imposed. Some checking accounts also offer interest; however the conditions under which interest is offered are usually much stricter than with a standard savings account.

Here are some easy ways to save:

• Establish a budget and include payments to your savings accounts as if they were one of your recurring bills.
• Keep a running balance or ledger of payments made to compare against your budget. This will enable you to track the status of your savings easily and to make adjustments when needed.
• Set realistic goals when planning for savings.
• Savings should grow in stages. Start by depositing money into a standard savings account and, when you have saved enough, move your savings to the next stage such as a CD account. There are many different accounts or investments into which your savings plan can grow.

For example:

• Money Market savings account
• Certificate of Deposit or "CD"
• Individual Retirement Account or "IRA"
• 401K
• U.S. Savings Bond
• Index Fund

Of course saving money can be a vast and all-consuming process. Start by setting modest financial goals when establishing a savings plan and make needed adjustments while you go. There are several links on the right-hand side of the page that will provide some additional advice and services.

In the red

Everybody wants your money. Huge amounts of time and effort are spent enticing consumers to spend their hard-earned money.

You will notice this now during the holidays more than any other time of the year. It seems that the public uses this season as an excuse to buy just about anything that catches their eye. Stores and merchants begin sales and decorations earlier every year hoping for the holiday spending spree to start. The day after Thanksgiving, which is the biggest shopping day of the year, is now referred to as Black Friday, a title previously reserved for the financial crisis of 1869. A fitting title, for it represents the feeling you get when you look at your finances the following January.

Studies and research have shown that marketing and advertisements do specifically and aggressively target younger generations. This is due in large part to the ease in which merchants can appeal to youths' impulsiveness and naivety. That being said, it's the duty of every young person to make sure they do not fall prey to impulse buying.

Spending money wisely also helps. Here are some tips:

• Avoid buyer's remorse; check prices on an item before taking the final plunge.
• Record every penny you spend in a check register or ledger. Recording purchases and expenses can track all spending.
• Use the Internet to research purchases. You can find what you want much cheaper at another on line store, or even find a similar product that is less expensive.
• Plan ahead for large purchases. A perfect example is Christmas: start planning for gift purchases earlier in the year. You will be financially prepared when December arrives.
• Distinguish between your wants and needs. Meaning, ask yourself before purchasing something whether or not it is really a necessity and how it will affect your budget.
• Make lists before going shopping to prevent unnecessary purchases. Limit yourself to a specific dollar amount.
• Take cash, not credit cards, on shopping trips.
• Avoid trendy clothes; buy “classic” styles made from high-quality fabrics that will last.
• Advertised items are not necessarily the cheapest. Just because something is "on sale," it doesn't mean it is the best price around.
• Learn when stores have their scheduled sales. It might pay to wait a few weeks to get the best deal or to hang out for an end of season sale.
• Because they get discounts from manufacturers for ordering heaps of stuff, larger stores are generally cheaper than smaller ones. If you do get a quote that's cheaper than what a large store offers, ask them to match or even beat it.
• Shop at alternative places such as trash and treasure markets, garage sales and warehouses.
• Check for a product warranty (if applicable) and length of the warranty.
• Ask if student discounts are available. Some computer stores, for example, offer generous discounts to full-time students or unemployed people. Ask!